Spotlight On: Turkey Hill Dairy

Already respected in its existing marketing territory, officials at Turkey Hill Dairy are looking to take their products into new areas.

Manufacturing ice cream and iced tea products may sound like a boatload of fun. However, for officials at Turkey Hill Dairy it is a serious business in a dog-eat-dog world of competitors, all looking for more space at supermarkets in some pretty congested categories.

Turkey Hill has made its mark regionally within both categories. Now the Conestoga, Pa.-based company has plans for expansion, for both the reach of its products—perhaps even taking them nationally—as well as the assortment. Faced with some hefty national and regional competition, Turkey Hill officials know that they must maintain the highest quality, offer a broad line of traditional and innovative products and keep the price points low enough that consumers do not get turned off.

“This company has gone through a remarkable change over the years,” says John Cox, Turkey Hill’s president since late last year and a three-decade employee of the company. “We started as a local dairy with home delivery, became a regional dairy and a regional CPG company and now we are becoming a national CPG company. We think we have the right strategy in place. It is a combination of producing quality products that consumers are interested in and customer service. We think we have a bright future.”

Turkey Hill’s past is not too shabby either. The 83-year-old company, which was founded by farmer Armor Frey in 1931 when he began selling bottled milk from the back of his car, has developed a solid reputation for itself up and down the Eastern Seaboard with its tea and ice cream products. The company started selling ice cream in 1954 and got into the refrigerated tea business around 1971 when officials realized that they could make tea in dairy plants. In the mid-1980s, around the time the company was sold to Dillons, a subsidiary of Kroger, they started to ratchet up the tea business growing the category in the Northeast with double-digit sales growth for 13 straight years.

The company, which has 29 flavors of tea products in four sizes, is rolling out its tea line nationwide with the help of co-packing arrangements with other plants across the country. It is estimated that Turkey Hill now produces about 57 million gallons of iced tea annually.

“It was very difficult for us to become a national brand because we were limited in how far we could ship refrigerated tea products,” Cox says. “But now we can utilize plants inTennessee, Kansas, Oregon and California to help us get fresh products to market.”

Expanding its assortment is also a priority. Cox says Turkey Hill is always looking to add flavors to its traditional product line, but is pushing Pure & Chilled, its six-SKU premium line of ready-to-drink teas that was introduced in the Northeast last year. It has also introduced a line of organic teas.

“Our original line has a great place in the market, but what will grow the category for us and our retailers is the premium line,” Cox says. “Our goal is to meet an emerging segment of consumers who want no preservatives in their tea with a simpler, fresher product with clean ingredients. We are learning a lot about this segment and what consumers want from it. We have already changed two of the six original flavors and we plan to add more products to the line in the near future.”

Ice cream of the crop
The company also has big plans for its ice cream products. Already offered in 80 flavors including limited editions, and accounting for nearly 30 million gallons annually, Cox says the strategy for ice cream is to further develop a bond with consumers that will build brand awareness of the product and help Turkey Hill gain market share.

“What we do better than anyone else is our relationship marketing,” he says. “We do this in a number of ways, including social media and sponsoring events, such as state fairs and rodeos, as well as being a promotional partner of several Major League Baseball teams, professional soccer teams and NFL squads. Our pitch is that we understand consumers and what they expect from ice cream and we devote ourselves to giving them the best quality product.”

The ice cream business has changed over the last five years. Back then none of the major manufacturers were making money from the category, Cox says, citing high costs and competitive issues. “Maintaining the quality of the product was first and foremost to us,” he adds. “For us, we went to our associates and asked them to help us drive some costs out of the system, Labor was not the problem, but we saw them as the only solution to deliver more value to consumers. They helped us in this regard.”

Offering consumers as many choices as possible is also very important. Last year, Turkey Hill unveiled its all-natural eight-SKU premium line that Cox says offers a higher price point and better margins for retailers. “It has been a home run for us,” he says. “We are going to take this line as far as we can because there are many consumers out there who want this type of product and are willing to pay for it.”

In the end, Cox is certain that working with retailers will play a big role in Turkey Hill’s growth. “We plan to be more entrepreneurial, which also means more creative and innovative,” he says. “We also plan to work more closely with our retail partners to determine what their goals and objectives are from the categories we serve. We are large enough to be able to offer them the resources they need, but we are still customer focused.

“We tell our employees all the time how important it is for us to help our retailers. If we help them, in the end it is going to help us.”